Heineken: Beer costs set to rise 15%

By Ewan Turney , 20-Feb-2008

Related topics: Company & City News, Drinks & Brands News

Heineken is third brewer in two days to warn beer prices are set to rocket

Heineken: Beer costs set to rise 15%

Heineken has warned that it expects a 15% increase in the costs of raw materials and packaging to increase the price of beer in 2008.


The Dutch brewer, hoping to secure a deal for Scottish & Newcastle (S&N) with Carlsberg, said it expects it will "fully pass on the impact of the increased input and energy costs in most of its markets".


Heineken's announcement is the third warning of rising beer prices in two days following Carlsberg and S&N yesterday.


Heineken said the intended acquisition of S&N's UK business would help it drive "premium Heineken brand growth".


It said: "The acquisition will also add attractive brands such as Newcastle Brown Ale, Foster's, John Smith's Bitter and Strongbow cider to Heineken's brand portfolio."


But Heineken made no mention of Kronenbourg, which many have speculated could be axed in favour of Heineken.


Heinekn grew volumes 20% on last year in the UK market despite the smoking ban and poor summer weather.


This was attributed to a high profile marketing campaign and acceptance of Heineken as a premium brand, the company said.


Overll, the company grew organic net profit 23%, revenues by 7% and volumes by 6% on last year.


Jean-François van Boxmeer, chief executive of Heineken, said: "Through our anticipated acquisition of Scottish and Newcastle, we will strengthen our global position, reinforce our European leadership and acquire strong platforms for further profitable growth.


"I am fully confident that despite the challenges of rising input costs and the uncertain economic outlook in some regions we will again be strong and competitive enough to deliver positive profit growth."

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